The impact of renewable energy on economic growth in the Southern African Power Pool (SAPP)

ABSTRACT

The past decade has seen an increase in renewable energy sources in the energy mix due to global environmental and supply security concerns. This paper aimed to investigate renewable energy effects on Gross Domestic Product (GDP) in the Southern African Power Pool (SAPP). The investigation is from 1988 to 2018, using the autoregressive distributed lag (ARDL), Nonlinear ARDL (NARDL), and fully modified OLS (FMOL) techniques. Based on empirical analyses of ARDL and FMOLS, it was found that both renewable and nonrenewable energies have a positive impact on economic growth in the Southern African power pool. However, the NARDL estimation indicates that neither renewable nor nonrenewable energy has a significant effect on economic growth in Southern African power pool. Therefore, based on the findings from both ARDL and FMOLS, the growth hypothesis is supported regarding the connection between renewable energy and economic growth in the Southern Africa power pool. Centered on the results, some policy implications were drawn for SAPP for sustainable economic growth, which includes measures to increase renewable energy in the energy mix, and also to encourage the optimization of cross-border connections where energy production from countries within SAPP that are not restricted by natural resources can be relied on to export sustainable energy. Additionally, building a more sustainable integrated power system in the region will assist SAPP with sustainable energy access and reduce the dependence on nonrenewable energy within the interconnected countries soon.

KEYWORDS:

• SAPP
• renewable energy
• NARDL
• ARDL
• FMOL

Acknowledgements

The authors acknowledge the support from the World Trade Organization (WTO), the National Research Foundation (NRF), and the Faculty of Economic and Management Sciences, North-West University (NWU). The findings, views, and opinions expressed and conclusions arrived at in this article are those of the authors and should not necessarily be attributed to the funding institutions.

Disclosure statement

The author(s) declare that they submit this manuscript to the journal without any conflicts of interest.

Ethical approval

This research complies with ethical standards concerning this manuscript. We declare that all ethical practices have been followed concerning the development, writing and publication of this article. We also obtained an ethics clearance certificate from our institution for this research.

Additional information

Funding

The work was supported by the World Trade Organization (WTO) [000]; National Research Foundation (NRF) [000].